Monday, September 05, 2011

End State

Via Tyler Cowen, by a somewhat labyrhinthine link chain, this quote from Keynes:

We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come--namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.

We seem to be approaching a tipping point in technology where robots will be replacing human workers in an increasing range of occupations. The numbers of the potentially unemployed are staggering. The logical outcome of such an economy is a situation wherein virtually all the wealth flows to the owners of capital - the robots - and a tiny cadre of experts still needed to ensure their functionality.

It's not implausible that a significant part of the current unemployment has exactly that character - that's a logical corollary of Cowen's ZMP idea. The problem, in that case, is not that we can't find new uses for labor, it's that such uses that are actually in the capacity of the average worker might no longer exist.